Spanish export market share in the past decade

The launch of the Single Market and the realignments of the peseta between 1992 and 1995 boosted Spanish goods exports, against the background of progressively strengthening world trade, to very high growth rates. During the 1993-97 period, exports advanced at an average rate of over 13% in real terms, whereby their share in world trade rose by 0.4 pp (0.9 pp in the EU market), while the share of Spain’s real GDP in global output diminished slightly (see Chart 1). In the following six years, however, export buoyancy has moderated, giving rise to a real average growth rate of exports of 5.7%, which has only allowed their share in world trade to stabilise. This performance in the last few years contrasts with the expansionary cycle seen by the Spanish economy in this period (Spanish GDP gained weight in world output) and with the export strength of other areas, such as South-East Asia, and central and eastern Europe, the countries in this latter region being in the process of joining the EU. Although the price competitiveness of Spanish exports partly explains their lower buoyancy in recent times (this measure of competitiveness worsened between 1998 and 2003), other factors, such as those relating to the pattern of trade specialisation and to changes in world demand for the various products, may have also been important. Two recently published studies – one in the Economic bulletin entitled «Comparative analysis of export demand for manufactures in the euro area countries» by Buisán and Caballero (2003), and one in the Boletín económico entitled «La industria manufacturera española en el contexto europeo (Spanish manufacturing industry in the European context)» by Gordo, Gil and Pérez (2003) – explored these factors and their effect on the performance of Spanish exports in recent years. The first of them estimates behavioural relationships for the exports of euro area countries and points out the significant disparity in the export responses of the various countries to changes in their fundamental determinants. The price elasticity of manufacturing exports is higher in Spain than in the other countries, which could be related to the export pattern of the economy, characterised by a greater presence of traditional manufactures and a lower relative weight of higher technology products. The second study analyses the pattern of productive and trade specialisation of the EU countries and reports the existence of differences of some importance between the productive structures of these countries. Although these differences have tended to grow moderately, Spain’s productive (and trade) structure has gradually become more characteristic of the average in the European markets. The present study focuses on analysing how the pattern of trade specialisation influences the aggregate behaviour of Spanish exports, and seeks to assess the extent to which this pattern has varied in response to changing international demand. It also explores the possible existence of specific competitive factors that may have been responsible for differences in the behaviour of Spanish exports. These questions are addressed using shift-share analysis, which enables the change in a variable (Spanish manufacturing exports) to be broken down into components and its behaviour to be assessed as a function of a reference variable, which in this case is the export market. The analysis was conducted using the disaggregation of external trade by branch of activity and technological intensity (see classification in annex to this paper) which, due to limitations in data coverage, made it necessary to restrict our research to nominal trade flows of manufactured goods with the EU. However, the exercise is representative in that manufactured goods account for 89% of total goods exports, of which 70% are to the EU. Chart 2 shows how the behaviour of the share of manufactured goods in the EU reasonably approximates the behaviour of the share of total exports in world trade. The next section analyses the change in share. Then follows an examination of the behaviour of Spanish manufacturing exports in nominal terms between 1993 and 2002, disaggregated by technological intensity, and an analysis of the various factors (specialisation and competitive advantage) that have contributed to their growth. Finally some conclusions are drawn.